Whole Foods Loans Help Get Small Vendors' Goods on the Shelves

When these local producers experienced growing pains, the supermarket chain gave them the capital they needed to expand.
Freelance Writer and editor, Self-employed
July 18, 2012

British native Tracy Claros is determined to change American cuisine one product at a time, which is why she founded The Sticky Toffee Pudding Co. The product: sticky toffee pudding, a popular dessert on the other side of the pond. Living in Austin, Texas, Claros knew she wanted to sell in Whole Foods, so she approached one location’s bakery department. The buyer loved the product and pretty soon she was selling in a few stores.

Before long though, supply was not keeping up with demand. Claros needed a new machine for her production line, so she approached the retailer for a loan.

“They ended up giving me a $25,000 loan, which helped me buy a new machine and change my packaging,” she says. “We are making five times the revenue now than we were before the loan; it really helped us a lot.”

Trevor Morris is also a big fan of Whole Foods loans. As co-founder of Gelateria Naia in Berkeley, Calif., the retailer approached his business in 2007 to be a vendor in a gelato showcase at the company’s Oakland, Calif., location. The partnership was successful, but Morris wanted more.

“In late 2010, we approached Whole Foods with the idea of making a gelato bar [like a candy bar, just with gelato], but we needed money to make it happen,” he says. “They gave us a $25,000 loan so we could get another delivery truck and since then, we’ve nearly doubled our revenue.”

Loan Details

Whole Foods launched its Local Producer Loan Program in 2006 as a way to help small vendors scale for multiple locations. According to Heather Kennedy, senior administrator for the program, Whole Foods has already distributed $7 million in loans to 135 vendors. Loans range from $1,000 to $100,000, the average being around $50,000. Interest rates are usually 5 percent with a five-year loan term.

What does Whole Foods look for?

“We are always looking for great organic products,” Kennedy says. “And we are looking to give loans to companies that match with our philosophy.”

She gives the example of Thompson Family Farms, a pork producer that was already rated a four out of five in animal welfare when they approached Whole Foods. The business needed a new processing facility to earn a level-five rating and Whole Foods granted them a loan.

“Now they are the first ever five-rated pork producer in the country,” she notes.

How to Get Noticed

In addition to offering something unique (gelato bars) or sustainable (top-rated pork), small businesses have many chances to get noticed by Whole Foods, starting by walking into a local store.

“We are a decentralized company, so each region really runs their own business that makes sense for them; they all have slightly different needs and products,” Kennedy says.

Take your product into a store and ask for the forager, offers Morris.

“Whole Foods is really run by individuals that can make decisions on their own,” he says. “Get a meeting with a local forager and ask them to try out the product. I’ve seen a lot of stores take on small brands and see what happens from there.”

Katie Morell is an independent writer and editor based in San Francisco. Her work has appeared in USA TODAY, Hemispheres, The Writer, Destination Weddings & Honeymoons, Chicago Tribune, Chicago Sun-Times, and many others.

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